# In the matter of G S Biotech Limited CP (IB) No.335-7-HDB-2022

> NCLT judgment dated 2023-03-24. Citation: TCN-2023-NCLT-04068. The State Bank of India (SBI), acting as the Financial Creditor, filed a Company Petition under…

- **Court:** NCLT
- **Order date:** 24 Mar 2023
- **Citation:** TCN-2023-NCLT-04068
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/g-s-biotech-limited-cp-ib-no335-7-hdb-2022-4b381a0c

## Summary

### Background

The State Bank of India (SBI), acting as the Financial Creditor, filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against M/s G S Biotech Limited, the Corporate Debtor. The petition was filed due to the Corporate Debtor's default on a financial debt amounting to Rs. 773,30,22,118.85 as of 30.09.2022. The Corporate Debtor had acted as a corporate guarantor for M/s G.S. Oils Limited, the principal borrower, which defaulted on its financial obligations, leading to its account being declared a Non-Performing Asset (NPA) on 11.07.2012. SBI sought the initiation of the Corporate Insolvency Resolution Process (CIRP), a moratorium, and the appointment of an Interim Resolution Professional (IRP). The Corporate Debtor opposed the

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## Facts

State Bank of India (SBI) filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against M/s G S Biotech Limited, the Corporate Debtor, due to a default on a financial debt. The outstanding debt amounted to Rs. 773,30,22,118.85 as of 30.09.2022. M/s G S Biotech Limited acted as a corporate guarantor for M/s G.S. Oils Limited, the principal borrower. M/s G.S. Oils Limited defaulted on its financial obligations, leading to its account being classified as a Non-Performing Asset (NPA) on 11.07.2012. SBI issued a notice dated 13.09.2012 under Section 13(2) of the SARFAESI Act. SBI filed OA No.451 of 2014 before the DRT-I, Hyderabad, to recover the outstanding dues. The DRT passed an order in Recovery Certificate No.451 of 2014 dated 10.01.2020,

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## Issues and analysis

### Issue 1: Whether a financial debt of a sum over rupees one crore is due and payable by the respondent to the …

**Ratio:** A judgment and/or decree for money in favor of the Financial Creditor, passed by the DRT,

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**Reasoning:** The NCLT relied on the Supreme Court's judgment in Dena Bank & others Vs. C. Shiva

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**Interpretation:** The interpretation of Section 7 of the IBC, along with the Supreme Court's

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**Application:** The Recovery Certificate issued by the DRT on 21.02.2020, pursuant to allowing

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** State Bank of…
- **Respondents:** G S Biotech…; M/s G S Biotech…

## Timeline

- **2012-07-11 — Account decla…**: The loan account of M/s GS Oils Ltd was…
- **2012-09-13 — Notice under SARFAESI…**: Notice issued under section 13(2) of Securitisation and Reconstruction of Financial…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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